we'd better stop talking as if we think the straight white male perspective is the only one that matters. For the past 70 years or so conservatives have opposed the demands for equal respect and equal rights by Jews, blacks, women, and gay people. Libertarians have not opposed those appeals for freedom, but too often we (or our forebears) paid too little attention to them. And one of the ways we do that is by saying "Americans used to be free, but now we're not"--which is a historical argument that doesn't ring true to an awful lot of Jewish, black, female, and gay Americans.
Let's consider, say, the year 1880.... no income tax... few federal economic regulations and regulatory agencies. No Social Security, Medicare, Medicaid, welfare, bailouts, or so-called stimulus plans. No IRS. No Departments of Education, Energy, Agriculture, Commerce, and Labor. No EPA and OSHA. No Federal Reserve. No drug laws...
women in 1880 had almost no meaningful rights to political participation, ensuring that they were unable to demand recognition and protection of their basic liberty rights through the political system.
Slavery was gone in 1880, but systematic state-enforced racial apartheid was going strong. The economic and political rights of blacks were severely curtailed under the various antebellum state Black Codes and then under the Jim Crow laws.
I would rather live with the group-status configurations that we have today than with those that prevailed in 1880. For that matter, I would rather live with the plumbing and dentistry that we have today than that which prevailed in 1880. But it's a swindle to suggest that if we had a libertarian polity we would be back in the days of Jim Crow or women's subservience. Just as it is a swindle to suggest that if we had a libertarian polity we would be back to using outhouses and having our teeth pulled without anesthetic.
If what you really, really care about are group-status issues, and you really, really think that those battles should be fought politically rather than culturally, and if you are really, really scared of where you think some older Americans stand on those group-status issues, then you can end up where Will Wilkinson is--deeply frightened of the Tea Party movement in spite of its libertarian focus. In that case, your plan is to slip something into the ruling intellectuals' drink to make them amenable to your free-market seductions.
Good luck with that.
[UPDATE: Will and I look like two idiots feuding. I apologize for my share of the idiocy, which could be anywhere up to 100 percent.]